NextEra Energy stock rating reiterated at Buy by UBS on budget bill benefits

Published 02/07/2025, 15:54
NextEra Energy stock rating reiterated at Buy by UBS on budget bill benefits

Investing.com - UBS has reiterated a Buy rating on NextEra Energy (NYSE:NEE) with a price target of $84.00, citing positive developments in the recently completed budget reconciliation bill. According to InvestingPro data, the utility giant, currently valued at $150.5 billion, trades at relatively high multiples compared to peers, suggesting investors are pricing in strong growth expectations.

The budget legislation maintained key provisions including safe harbor and tax transferability, which UBS notes provides NextEra with an operational runway extending to 2029 and additional time for safe harbor activities.

UBS highlighted that the final version of the bill removed excise taxes, representing another favorable outcome for the utility company.

NextEra Energy shares made an 8% recovery during intraday trading on July 1 from their low point, according to UBS, which noted the stock currently trades at a 3% premium to the broader Utility group based on the firm’s 2027 earnings estimate of $4.33.

UBS maintains that NextEra Energy presents a positive risk/reward profile following the resolution of this legislation, supporting its continued Buy recommendation.

In other recent news, NextEra Energy has been navigating several developments that could impact its future financial performance. UBS has reiterated a buy rating on the company, maintaining a price target of $84.00, citing favorable Senate tax proposals that provide more flexibility for managing earnings impacts. In contrast, Erste Group downgraded NextEra Energy from Buy to Hold, noting concerns over rising financial debt despite anticipated earnings and dividend growth. Meanwhile, Mizuho (NYSE:MFG) Securities reduced its price target from $73.00 to $69.00, retaining a neutral rating, and highlighted potential risks associated with tariff and tax credit management. The Senate tax proposal, seen as more gradual than the House’s version, is expected to benefit NextEra by aligning with its business planning strategies. UBS believes the proposed changes offer growth opportunities as NextEra transitions away from tax credits. However, the company faces challenges with its financial leverage, as noted by Erste Group, which could affect its financial stability. The ongoing Florida Power & Light rate case and potential legislative changes remain key areas of focus for investors monitoring NextEra’s financial outlook.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.